Singh v Owners of Strata Plan 11723
[2013] FCCA 506
•12 June 2013
FEDERAL CIRCUIT COURT OF AUSTRALIA
| SINGH v OWNERS OF STRATA PLAN 11723 | [2013] FCCA 506 |
| Catchwords: BANKRUPTCY – Application for annulment and for orders restraining the sale of property – interim relief refused. |
| Legislation: Bankruptcy Act 1966 (Cth), ss.37, 84, 153B |
| Jagjit Singh v Owners Strata Plan No 11723 [2012] FCA 538 Singh v Owners Strata Plan No 11723 (No 3) [2012] FCA 1121 Singh v Owners Strata Plan No 11723 (No 4) [2012] FCA 1180 The Owners - Strata Plan No 11723 v Jagjit Singh and Sarbjit Kaur [2012] FMCA 308 |
| Applicant: | JAGJIT SINGH |
| Respondent: | OWNERS OF STRATA PLAN 11723 |
| File Number: | SYG 1246 of 2013 |
| Judgment of: | Judge Driver |
| Hearing date: | 12 June 2013 |
| Delivered at: | Sydney |
| Delivered on: | 12 June 2013 |
REPRESENTATION
The Applicant appeared in person
| Solicitors for the Respondent: | Ms S Quang Grace Lawyers Pty Limited |
INTERLOCUTORY ORDERS
The second applicant be removed as an applicant to the proceedings.
The application for interim relief is dismissed with costs.
Paragraph 2 of the application for final orders is struck out.
No further steps are to be taken in relation to the application by either party without leave of the Court.
The application is listed for further directions at 9.30am on 9 August 2013.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT SYDNEY |
SYG 1246 of 2013
| JAGJIT SINGH |
Applicant
And
| OWNERS OF STRATA PLAN 11723 |
Respondent
REASONS FOR JUDGMENT
(revised from transcript)
On 4 June 2013 Mr Singh filed an application in this Court seeking interlocutory and final relief in relation to the administration of his bankrupt estate. The application came before me on that day on an urgent basis as the duty judge. The application seeks final relief that the applicant’s bankruptcy be annulled, pursuant to s.153B of the Bankruptcy Act 1966 (Cth) (Bankruptcy Act) and also seeks to set aside the judgment debt supporting the sequestration order which had been made, pursuant to part 36, rule 36.15(1) of the Uniform Civil Procedure Rules 2005 (NSW). The application also seeks the following interim orders:
1.Stay the sale proceedings of the applicant properties till decision of this application;
2.Stay the sale proceedings of the applicant properties till decision by the District Court on Notice of Motion filed for setting aside the default judgment obtained irregularly/illegally against good faith admitted by own submission of Defendant on 07 March 2012 pursuant to Part 36, Rule 36.15(1) of Uniform Civil Procedures Rules 2005 (NSW) etc.
The application is supported by the affidavit of Mr Singh, made on 4 June 2013.
It was apparent when the matter came before me on 4 June 2013 that nothing had been served on either the respondent petitioning creditor or the applicant’s trustee in bankruptcy. I ordered that the application for interim relief be listed today at 10.15am on condition that Mr Singh served a copy of the application, supporting affidavit and my orders on the petitioning creditor and the trustee in bankruptcy. I am satisfied that that has been done. The petitioning creditor was represented at today’s hearing. The trustee did not appear, on the basis that the trustee is not a respondent to the application, but Stephen Hathway, of the insolvency firm responsible for the administration of the bankrupt estates of Mr Singh and his wife Sarbjit Kaur, provided an affidavit made on 11 June 2013 detailing the history of the administration of the estates.
The application is opposed by the petitioning creditor, which relies upon the affidavit of Sylvia Quang made on 7 June 2013. The petitioning creditor also provided written submissions. For the purposes of today’s proceedings I also received as exhibits, a notice of child support debt, apparently received by the trustee on 11 May 2012 and a letter dated 4 June 2013 from Insolvency and Trustee Service Australia (ITSA) to Mr Singh. This concerned ITSA’s response to complaints made by Mr Singh about the administration of the bankrupt estates.
Essentially, Mr Singh complains that the judgment debt supporting the creditor’s petition and the sequestration orders obtained on that petition were fraudulently obtained. I received a document prepared by Mr Singh headed “Analysis of discrepancies and amounts wrongly claimed in the creditor’s petition”. I received that document as a submission. According to Mr Singh, the amount claimed in the creditor’s petition was overstated by $1384.00. It follows that Mr Singh does not contest that there was a debt of approximately $20,000.
Regrettably, due to extensive legal action taken by Mr Singh in order to agitate his complaints of fraud and other action necessitated by complaints made by Mr Singh, the costs of the administration of the bankrupt estate has been very substantial, and the trustee estimates that it will exceed $100,000. Mr Singh has not co-operated with the trustee in the administration of the estates. His wife, however, has. The application before the Court was brought in the name of both Mr Singh and his wife. However, having regard to the facts that the application is signed only by Mr Singh and Mr Hathway’s affidavit advances the opinion that it is unlikely that Ms Kaur supports the current application, and in the absence of any evidence that Ms Kaur knows of the application and wishes to be a party to it, I ordered that she be removed as an applicant.
The bankruptcy has had a lengthy and, in my view, unfortunate litigation history. That history is detailed in the respondent’s submissions:
The Applicants were made bankrupt following the making of a sequestration order by Federal Magistrate Smith on 5 April 2012 in proceedings number SYG2032 of 2011. The decision was published on or about 17 April 2013 in The Owners – Strata Plan No 11723 v Jagjit Singh and Sarbjit Kaur [2012] FMCA 308[1].
[1] Affidavit of Sylvia Quang dated 7 June 2013 at [7] and Annexure “SQ5”
The interim relief sought in the application filed 4 June 2013 effectively seeks a suspension of the sequestration order made 5 April 2012 as there are currently no “sale proceedings” being prosecuted by the Trustee of the bankrupt estate of the Applicants[2].
[2] Affidavit of Stephen Hathway dated 11 June 2013 at [57]-[59]
Section 37(2) of the Bankruptcy Act 1966 (Cth) provides that the Court does not have power to suspend the operation of a sequestration order.
Whilst it is not expressly stated the grounds upon which the First Applicant seeks to rely on in the application for annulment appear to be:
(a) That the Respondent filed incorrect or wrong documents and based on those incorrect documents, the Federal Magistrate refused to go behind the default judgment debt obtained by the Respondent in the Local Court, which is incorrect[3];
[3] Affidavit of Jagjit Singh dated 4 June 2013 at [3]-[5], [8], [10]-[13]
(b) In addition the amounts claimed in the Local Court and the Respondent’s creditor’s petition were never assessed by any Court and this was admitted on behalf of the Respondent on 14 August 2012[4];
[4] Ibid at [9]
(c) That the Respondent’s written outline of submissions dated 7 March 2012 were not served on the First Applicant in accordance with directions made in those proceedings on 29 November 2011 and this alleged failure is not mentioned in the Reasons for Judgement of Federal Magistrate Smith[5];
[5] Ibid at [6]-[7]
(d)That the First Applicant has since filed a Notice of Motion in the District Court of New South Wales proceedings seeking to set aside the default judgment obtained by the Respondent in the Local Court on 6 May 2011[6];
[6] Ibid at [22]-[24]
(e)That the Trustee of the Applicant’s bankrupt estates has not been able to obtain proof of debt forms from the Respondent in accordance with section 84 of the Bankruptcy Act 1966 (Cth)[7];
[7] Ibid at [15]-[18]
(f) If the Respondent is able to submit a proof of debt form for the amount of $21,444.61 then the Applicants have enough liquidity to make immediate payment and claims the value of the Applicant’s accounts are worth million[s] of dollars[8]; and
[8] Ibid at [20] and [25]
(g) That the sequestration order made on 5 April 2012 was obtained illegally or irregularly through the falsification of documents which were found to be in violation of fundamental laws and should be set aside pursuant to Rule 36.15 of the Uniform Civil Procedure Rules 2005 (NSW)[9].
[9] Ibid at [26]-[29]
On 24 April 2012 the First Applicant filed a Notice of Appeal from the Federal Magistrates Court in relation to the sequestration order made 5 April 2012 in the Federal Court of Australia proceedings number NSD 593 of 2012 (First Applicant’s Appeal)[10].
[10] Affidavit of Sylvia Quang dated 7 June 2013 [8] and Annexure “SQ6”
An interlocutory application seeking a stay of proceedings in respect of the sequestration order was filed by the First Applicant on 2 May 2013 and dismissed by the Court on 24 May 2012 in Jagjit Singh v Owners Strata Plan No 11723 [2012] FCA 538[11] following a review of each of the grounds of appeal sought to be advanced by the First Defendant and whether there were any arguable points.
[11] Ibid at [9]-[10] and Annexures “SQ7” and “SQ8”
Subsequently on 16 October 2012 the Federal Court of Australia made the following orders in Singh v Owners Strata Plan No 11723 (No 3) [2012] FCA 1121:
1.The notice of appeal filed on 24 April 2012 is struck out under s.25(2B)(aa) of the Federal Court of Australia Act 1976 (Cth) as an abuse of process.
2.The amended notice of objection to competency filed 18 July 2012 is dismissed.
3.The appellant is to pay the respondent’s costs of its amended notice of objection to competency and its interlocutory application filed 5 October 2012.
4.The matter is listed for directions before me at 9:30 am on Tuesday 23 October 2012.
On 26 October 2012 the Federal Court of Australia made the following orders in Singh v Owners Strata Plan No 11723 (No 4) [2012] FCA 1180:
1.The appellant’s application for leave to amend the notice of appeal is dismissed.
2.The notice of appeal filed on 24 April 2012 is dismissed under both ss.25(2B)(ba) and (bb) of the Federal Court of Australia Act 1976 (Cth) for want of prosecution and failure to comply with the Court’s directions.
3.The appeal scheduled to be heard on 5 November 2012 is vacated.
4.The appellant is to pay the respondent’s costs of and incidental to the interlocutory applications the subject of these proceedings and also of the appeal.
There is currently no appeal on foot in respect of the sequestration order made 5 April 2012.
In addition to the appeal from Federal Magistrates Court proceedings SYG2032 of 2011 to the Federal Court of Australia, the First Applicant has unsuccessfully sought to challenge the default judgment obtained on 6 May 2011 in the Local Court of New South Wales on which the Respondent’s creditor’s petition was partly based, as follows:
(a) Application to set aside the default judgment in the Local Court of New South Wales, dismissed on 30 June 2011[12];
(b) Appeal to the District Court of New South Wales, dismissed on 8 June 2012[13]; and
(c) Application to transfer the appeal proceedings in the District Court of New South Wales to Supreme Court of New South Wales, dismissed on 18 May 2012[14].
The First Applicant has also recently filed a Notice of Motion in District Court proceedings 2011/271370 on 2 April 2013 seeking to set aside the default judgment obtained by the Respondent on 6 May 2011 in the Local Court of New South Wales[15]. The affidavit in support dated 2 April 2013 filed by the First Applicant is almost identical if not substantially similar to the affidavit of the First Applicant dated 4 June 2013 in these proceedings.
[12] The Owners - Strata Plan No 11723v Jagjit Singh and Sarbjit Kaur [2012] FMCA 308 at [7]
[13] Affidavit of Sylvia Quang dated 7 June 2013 at [28]-[38] and Annexure “SQ17”
[14] Jagjit Singh v Owners Strata Plan No 11723 [2012] FCA 538
[15] Affidavit of Sylvia Quang dated 7 June 2013 at [39] and Annexure “SQ18”
It is unfortunate that Mr Singh has been bankrupted for a strata levy debt which at the time of the act of bankruptcy was relatively modest. He has, however, displayed an unmovable determination not to pay that debt. The debt has increased over time, both because of additional liabilities for strata levies and very substantial costs of recovery of which the dominant cause has been Mr Singh’s own resistance.
The alleged discrepancy in the amount claimed by the strata plan owners in the creditor’s petition was dealt with in the reasons of this Court in making the sequestration order. That decision was not disturbed on appeal in the Federal Court. Having regard to the affidavit of Stephen Hathway, I accept that the trustee has identified substantial liabilities and the immediate means of meeting those liabilities lies in the sale of two house properties in Harris Park and Rutherford. The trustee estimates, based on the statement of affairs filed by Ms Kaur and his own investigations, that the sale of those properties may realise funds of approximately $355,000. The trustee has estimated debts owed in the bankrupt estate of somewhat in excess of $207,000, although there may be a question concerning a debt claimed by the Child Support Agency.
The trustee’s estimate of the costs of administration exceeding $100,000 would suggest that there may be a modest surplus in the event that the two properties are sold. Any surplus would benefit the bankrupts. I am not persuaded that Mr Singh’s continuing allegations of fraud provide a sufficient reason to restrain the trustees from continuing with efforts to sell the properties. I also accept that s.37(2) of the Bankruptcy Act would not permit the Court to suspend the continuing administration of the bankrupt estate.
I have concluded, based on the material before me, that the appropriate approach to take is to dismiss, with costs, the application for interim relief.
That leaves the application for final orders. Mr Singh seeks the annulment of his bankruptcy pursuant to s.153B of the Bankruptcy Act. He also seeks other relief which, in my view, would be beyond the jurisdiction of the Court and would be properly matters for New South Wales state courts to consider. Mr Singh has been agitating his allegations of fraud in the District Court of New South Wales. Those efforts have, to date, been unsuccessful. His latest, and possibly, final effort is in the form of a notice of motion which will come before the District Court on 8 August 2013. I do not want to put the parties to further trouble and expense in relation to the annulment application, pending the resolution of that proceeding in the District Court. I was invited by the respondent petitioning creditor to summarily dismiss the application as a whole, but I am not persuaded that I should do that at this stage. I will strike out paragraph 2 of the application for final orders and I will further order that no further steps be taken in relation to the application by either party without leave of the court. I will direct that the application be listed for further directions at 9.30 am on 9 August 2013.
I certify that the preceding twelve (12) paragraphs are a true copy of the reasons for judgment of Judge Driver
Date: 13 June 2013
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